How to Get Rich

He’s young – 22 years old. But I’ve known him since he was 10, when he lived two doors down from me. And I want to get him pointed in the right direction in life… right now.

What advice do you give a 22-year-old just starting out? It’s the same advice I’d give just about anyone who wants to grow his wealth…

I quickly pulled the book How to Get Rich by Felix Dennis off my bookshelf. This book is fantastic for this new employee… and maybe you, too.

How to Get Rich is the most honest story of how to generate wealth I’ve ever read.

The book isn’t like any other “self-help” book you’ve ever read. It’s a rare gem for two reasons: 1) It was written by a guy who actually made himself filthy rich, and 2) the guy can write. It is an easy read.

As for advice for the young man in my office, Dennis writes:

If you are young, then I ask to you remember just this: you are richer than anyone older than you… Time is always running on, and the young have more of it in their pocket than the richest man or woman alive…

Continuing on this idea, if you could “turn the clock back for me by forty years,” Dennis says, “I would willingly swap you every penny and every possession I own in return.And I would have the better end of the bargain, too!”

The young are richer than the richest man… I love that perspective for a young man starting out.

But the book is not just about advice for young people starting out – far from it. It’s for all people aspiring to have more money in their lives.

I guarantee you will disagree with Dennis on many things he says. You won’t believe that rich people think the way he does… or that what he says is really how to get rich. But from what I’ve learned after accumulating a few dollars in my life, Felix Dennis is telling the truth.

Don’t get me wrong… the book is not a step-by-step how-to book on getting rich. But to me, it is far more valuable. It is an accurate explanation of how Dennis became rich and what he thinks it would take for you to get rich, too.

He dares you to make yourself rich… to go for it. And he warns you will never get rich if…

You are unwilling to fail…

You care what the neighbors think…

You are not prepared to work longer hours than almost anyone you know…

You cannot convince yourself that you are “good enough” to be rich…

Felix Dennis doesn’t sugarcoat it. He tells it how it is.

It is a must-read for my new young employee… And going back through it this week reminded me that it’s a must-read for you, too.

What you need to do to build your wealth today…

“You need to develop an asset allocation and stick to it,” Dave Eifrig writes in his Retirement Millionaire newsletter.

Not everyone wants to or can get rich like Felix Dennis… by building a successful business. But everyone who invests needs to understand how to use their investments to build their wealth.

My colleague Dave Eifrig believes the first step is finding the right mix of investments… or asset allocation. Here’s how he suggests getting started…

Once you set aside some cash for emergencies… start with a simple allocation where you decide between just stocks and bonds. If you have a longer-term view and a high tolerance for risk, you could make your allocation 80% stocks and 20% bonds.

If you are closer to retirement and don’t like volatile returns, you could do 80% bonds and 20% stocks. And you might fall anywhere in between.

You can get an entire degree learning how to “optimize” these in your portfolio… trying to nail the perfect risk/return ratio. But all this optimization is based on forecasts that are wrong more often than they are right.

Dave believes a 60/40 stock and bond allocation is a good “middle of the fairway asset-allocation plan.”

If you set a plan, and stick to it, you can grow a lot of wealth over time through investing. The key of course, is sticking with it.

Do you have a plan? Are you following it? If not, there’s no better time to start than now. This probably won’t get you Felix Dennis rich… but it will allow you to build wealth in the markets. Now get going…

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